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Service level agreements -- The IT
service providers' success platform
Chamber Programmes
Annual Spring Dinner
BUSINESS
April 2002 Issue
 Service level agreements The IT service providers' success platform  Service level agreements can be reformed from static documents to
platforms of success if properly prepared By ANGUS FORSYTH and YVONNE CHIA The wider adoption of e-commerce, corresponding sophistication of IT
infrastructure and the present global economic downturn have sharpened customers'
expectations and intensified competition for IT service providers. Although The true value of SLAs lies in the two-way communication involved in their preparation, which allows customers to think through and voice their needs to service providers to supply what is demanded. Deliberative customisation is an important differentiator of services and often builds customer loyalty. SLAs -- issues to consider & temptations to resistService providers should carefully analyses their capabilities, expertise and infrastructure when drafting SLAs. They must also assess how their resources can be best allocated in view of customers' business objectives, technical support requested, existing infrastructure, scope and level of services, application timetable and costs. It is important to resist giving attractive promises which would be difficult to deliver -- the time when such temptation didn't matter is now long gone -- but attractive promises can be included if watered down by strings of small print exemption clauses. Exemptions clauses of SLAs -- Hong Kong judicial & statutory positionsUnder common law, the following three ingredients must be baked into an exemption-clauses pie: incorporated into the contract; properly and fully construed, covers the damage caused; and there is no other rule of law which invalidates the exemption clause. The effect of the general judicial "contra proferentem" rule of construction is that ambiguity is construed against the party seeking to rely on the clause. As a brief guideline, the following hurdles must be overcome before terms are incorporated:
Under Hong Kong law, the Control of Exemption Clauses Ordinance (Cap. 71) (the "Or-dinance") controls the extent to which liability can be limited or excluded for negligence and breach of contract. In short, the Ordinance renders certain types of exemption clauses totally void, such as clauses excluding or restricting liability for death or personal injury resulting from neglig-ence. It also requires certain exemption clauses satisfy the "reasonableness" test to be proved by the person invoking the clause, e.g. clauses excluding or restricting liability for negligence other than negligence causing death or personal injury. SLA markersSLAs, like any other contracts, must constitute full records of parties' intentions. Typical components of a SLA include: Identification of Parties & Recitals
Service Terms
Payment Terms
Intellectual Property
Warranties
Duration and Validity of Agreement
"Boiler Plate" For example, notices, force majeure and entire agreement provisions. Applicable Law and Mode of Dispute Resolution
With the multi-jurisdictional nature of e-commerce, special care should be given to jurisdictional issues and areas of conflict of laws which are beyond the scope of this article. The writers would like to point out, however, that parties should think through how IP rights, which are generally granted on a geographical/jurisdictional basis, can be protected and enforced where different jurisdictions are likely to be involved. Although international difficulties with this problem are causing it to be examined worldwide, there is no real progress towards even a reduced series of credible options and it remains a very complex area on which specific advice should be sought. SLM and corporate governanceService level management (SLM), not SLAs, is the ultimate platform for success. Even though service providers have worked out the best solution for the customer and reached an agreed quality standard as documented in SLAs, this is only the beginning. Under the corporate governance discipline of the SLM umbrella, the service providers must now deliver what they have promised. A structured and efficiently backlit SLM will enable business to provide quality service. This is done by proactively operating constant service level monitoring to spot problems. Properly implemented, this automatically activates the corresponding change mechanism to restore the due quality. SLM also systematically determines what caused problems and, better still, manages service factors to avoid potential problems. SLM creates defined and repeatable processes for service improvements and a speedy remedy. The remedial work will, in turn, impact on the service providers' overall capacities and corresponding adjustment and need for additional resources should be drawn to the management's attention to ensure performance of service providers' other services are not adversely affected. Corporate governance is intrinsically wedded to SLM and represents the top level, directional glue that melds together the disparate components of shaping the management style, corporate culture, core competency and, lastly, ensuring operational excellence. Angus Forsyth and Yvonne Chia are
with IT Practice Group of Stevenson, |
service level agreements (SLAs)
are simply a type of contract between service providers and their customers to identify
the agreed services to be provided and their respective responsibilities, properly
prepared SLAs can be a service providers' platform to success.| About HKGCC | Member Services | Join Us | Contact Us | Advertising | Jobs |
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